Free - Beyond Collapse

Saturday, August 3, 2013

If You Think The Employment Numbers Are Good, Then You Really Need To Read This Article

Guest Post By Michael Snyder

Do you actually believe that the employment numbers are getting
better? Do you actually believe that there is a bright future ahead for
American workers? If so, then you really need to read this article.
The truth is that we are in the midst of the worst employment crisis
since the Great Depression,
and there has been absolutely no employment recovery. In fact, the
percentage of working age Americans that are employed is just about
exactly where it was during the darkest days of the last recession.

But the mainstream media is not telling you this. The mainstream media
is instead focusing on the fact that the official "unemployment rate"
declined from 7.6% in June to 7.4% in July. That sounds like great
news, but when you take a deeper look at the employment numbers some
very disturbing trends emerge.

Over the past several years, almost the entire
decline in the unemployment rate can be accounted for by people
"leaving the workforce". The "unemployment rate" has not been going
down because people are actually getting jobs. Rather, the
"unemployment rate" has been going down because the government has been
pretending that millions upon millions of American workers simply do
not want jobs anymore. This is extremely misleading.

We are being told that 162,000 jobs were created in July. Okay, so
that is just barely enough to keep up with population growth, and most
of the jobs that were created last month were part-time jobs.

The change in total nonfarm payroll
employment for May was revised from +195,000 to +176,000, and the
change for June was revised from +195,000 to +188,000. With these
revisions, employment gains in May and June combined were 26,000 less
than previously reported.

Will this month eventually be revised down too?

When it comes to measuring employment in the United States, I believe
that a much more accurate measurement than the highly manipulated
"unemployment rate" is the civilian employment-population ratio. This
ratio tells us what percentage of working age Americans actually have a
job.

Just prior to the last recession, about 63 percent of all working age
Americans had a job. During the recession, that number plunged
dramatically and ultimately fell below 59 percent, and it has stayed
below 59 percent for 47 months in a row...

This is the first time in the post-World War II era that the employment-population ratio has not bounced back after a recession.

So there has not been an employment recovery. Anyone that tells you that there has been an employment recovery is lying to you.

Since the end of 2009, we have been treading water at best. But during
that time, another disturbing trend has emerged. Good paying
full-time jobs are rapidly being replaced by low paying part-time jobs.

And this trend has definitely accelerated this year. If you can believe it, an astounding 76.7 percent of the jobs that have been "created" in 2013 have been part-time jobs.

As I wrote about last month,
the employment landscape in this country is fundamentally changing.
At this point, the number one employer in this country is Wal-Mart, and
the number two employer in this country is a temp agency (Kelly Services).

Our young adults are being hit particularly hard. According to Gallup, the percentage of working age Americans under the age of 30 with a job fell from 47.0% in June 2012 to 43.6% in June 2013...

Fewer Americans aged 18 to 29 worked full time for an
employer in June 2013 (43.6%) than did so in June 2012 (47.0%),
according to Gallup's Payroll to Population employment rate. The P2P
rate for young adults is also down from 45.8% in June 2011 and 46.3% in
June 2010.

When
our young people get out of school and enter the real world, they are
finding that "good jobs" are few and far between. But unless our young
people can find "breadwinner jobs", they are not going to be able to get married, buy homes and raise families.

A lot of young people are doing their best, but things are really tough
out there right now. The lack of good jobs is the primary reason why
families that have a head of household under the age of 30 have a
poverty rate of 37 percent.

A lot of young adults are coping with this employment crisis by moving
back in with their parents. According to one recent study, 36 percent of all young adults in the 18 to 31 age bracket are currently living with their folks.

-The number of part-time workers in the United States has just hit a brand new all-time high, but the number of full-time workers is still nearly 6 million below the old record that was set back in 2007.

-An astounding 53 percent of all American workers make less than $30,000 a year.

And as I mentioned yesterday,
until we have a jobs recovery there will be no housing recovery no
matter how much the Federal Reserve tries to manipulate the system.

The mainstream media continues to insist that "things are looking up"
for the housing market, and yet the home ownership rate in the United
States is the lowest that it has been in 18 years.

In
order for the middle class to thrive, people have got to be able to
get good jobs and people have got to be able to buy homes.

Instead, the percentage of good jobs in our economy continues to shrink, the level of home ownership continues to decline, and less than half of all Americans now consider themselves to be middle class.

The next wave of the economic crisis has not even hit us yet, but we
continue to see poverty rates soar all over the nation. In fact, just
this week there was an article about the tent cities that are starting
to pop up all over New Jersey...

Tent cities have popped up across New Jersey including the state's poorest city.
Meg Baker chased the story of Camden's tent city. Residing off Route
38 at Wilson Boulevard under an overpass, through woods and down a path
of trash lays a community of people living in tents. This particular
community was relocated from Federal Street and it's inhabited by an
array of people: addicts, people who have fallen on hard times and some
with mental illness.

Baker took a tour of this
run down community and the pictures show just how heart-wrenching this
situation really is. Among the homes are decomposing food, broken
furniture, and feral cats.

This is supposed to be "the economic recovery".

If things were going to get "better" it should have happened by now.

But things didn't get better, and now the next wave of the economic crisis is rapidly approaching.
As I tried to explain the other day,
the most important number in our economy is the yield on 10-year U.S.
Treasuries. As that number goes up, interest rates all over our
economic system go up. And much higher interest rates would be
absolutely devastating for our economy.

Unfortunately, many analysts now believe that interest rates are going
to go much, much higher than they are right now. Just check out this
excerpt from a recent CNBC article...

The Federal Reserve will lose control of interest rates as
the "great rotation" out of bonds into equities takes off in full
force, according to one market watcher, who sees U.S. 10-year Treasury
yields hitting 5-6 percent in the next 18-24 months.

"It
is our opinion that interest rates have begun their assent, that the
Fed will eventually lose control of interest rates. The yield curve
will first steepen and then will shift, moving rates significantly
higher," said Mike Crofton, President and CEO, Philadelphia Trust
Company told CNBC on Wednesday.

If interest rates
do go that high, our economy simply will not be able to handle that.
It would cripple the finances of state and local governments all over
the nation, it would absolutely crush the housing market, and it would
cause a derivatives crisis unlike anything that we have ever seen before.

The smart money knows that rising interest rates spell big trouble and they are already pulling their money out of the market as a Bloomberg article recently detailed...

Private-equity managers from Fortress Investment Group LLC
(FIG) to Blackstone Group LP (BX), which made billions by buying low
and selling high, say now is the time to exit investments as stocks
rally and interest rates start to rise.

And Apollo Global Management LLC Chief Executive Officer Leon Black said the following back in April...

"It’s almost biblical: there is a time to reap and there’s a
time to sow," Apollo (APO)’s Black said at a conference in April. "We
think it’s a fabulous environment to be selling. We’re selling
everything that’s not nailed down in our portfolio."

The smart money is getting out while the getting is good.

They know that a storm is coming.

They know what higher interest rates will do to the economy.

As bad as the employment picture is right now, this is NOTHING compared to what is coming.

This is about as good as things are going to get. It is all downhill from here.

So enjoy this false bubble of pseudo-prosperity while you still can.

When the next great wave of the economic crisis strikes, millions upon
millions of Americans are going to lose their jobs and the official
unemployment rate is going to soar well up into the double digits.